More legal problems confront HSBC this morning. Investors are planning a multimillion-dollar lawsuit over the collapse of Lehman Brothers. The target is London-based HSBC. The complaint relates to distributing Lehman-backed bonds. As always HSBC says it will vigorously contest the case.
In the United States it is alleged that HSBC cannot make loans in the State of Indiana at this time. Indiana recently changed requirements for lending licenses, and now requires fingerprinting of branch and district managers. When we called the Indiana Department of Financial Institutions we were able to verify the new fingerprinting requirement.
While the state did verify that HSBC’s application is pending, a spokesman would not address whether the requirement had been met, or whether it was legal to process loans at HSBC’s Beneficial and HFC offices at this time. The State of Indiana did say we should focus on loan closings, but simply taking applications and appraisal fees contingent upon acceptance and closing was an issue they would not address.
Is it misrepresentation when HFC and Beneficial take applications, if in fact HSBC knows they cannot close on the loans? When I asked the question the Department of Financial Institutions spokesman asked me for the source of my report. When I refused to give the source he told me that any anonymous reports received by the Indiana Department of Financial Institutions go directly into the trash, and I could take that for what it is worth.
When I said “It is my understanding that customers are told that new 2009 licenses have not been received” Indiana DFI would not speak to that, other than to say “the application is pending.” When I asked if “pending” meant that fingerprints had not been received I did not receive a direct answer.
How this matter effects HSBC’s HFC and Beneficial customers with anticipated closing dates from early January through the present is unknown at this time. There is no estimated date for when HSBC will be in total compliance in the State of Indiana.
You can contact the Indiana DFI at:
Department of Financial Institutions
30 South Meridian St., Suite 300
Indianapolis, Indiana 46204
317-232-3955
800-382-4880
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